Mental Health Billing Fees: Percentage of Which Collections?

The percentage is half the quote

“Six percent” tells you almost nothing on its own. Six percent of what, exactly, and measured when?

Practices compare billing quotes by lining up percentages, because that is the part everyone states plainly. The basis is usually further down, phrased in a way that is accurate and easy to skim past. Two quotes that look a point apart can differ by much more than a point once you know what each one is charged on.

The four bases, and what each one does to your bill

• Gross charges billed. The percentage applies to what was submitted, regardless of what arrived. You pay the same on a claim that was denied and written off as on one paid in full. This basis moves the risk entirely onto the practice.
• Total collections. Everything the practice receives, insurance payments and patient payments together. Patient copays, coinsurance, deductibles and self-pay all carry the fee, including money the practice collected at the front desk.
• Insurance collections only. The fee applies to what payers actually paid. Patient payments carry nothing.
• Net collections after adjustments. Similar to the above but defined against a specific adjustment set, which is where the definitions get long.

The gap between the second and third is the one that bites. In a practice with meaningful patient responsibility, high-deductible plans or any self-pay work, a percentage on total collections is charged on money the practice often collected itself.

Six questions that make two quotes comparable

1. Is the percentage charged on charges billed, or on money received?
2. Are patient payments included in the basis? Copays, coinsurance, deductibles and self-pay, each specifically.
3. What about money I collect at the front desk, or through my own portal?
4. Is there a monthly fee, a per-provider fee, a per-claim fee or a minimum, on top of the percentage?
5. How is old accounts receivable handled, the balances that existed before we started?
6. What is billed separately and passed through at cost?

Ask them in writing. A billing company that answers all six plainly is telling you something about how it will answer questions later.

How CareVixis answers it

For the sake of a worked example, here is the same set of answers for CareVixis, which publishes them rather than quoting them per practice.

Core revenue cycle management is 6% of insurance collections. Nothing on patient payments. VixisConnect™ communications and VixisGrowth™ growth services are +1% each, so the ladder is 6% of insurance collections for revenue cycle management, 7% with VixisConnect™, and 8% with VixisConnect™ and VixisGrowth™.

On the other questions: copays, deductibles, coinsurance and self-pay are never charged; keeping the EHR you already have carries no monthly software fee from CareVixis; there are no hourly rates, because billing and A/R follow-up are covered by the percentage; legacy accounts receivable is 10% of what CareVixis actually recovers, charged on recovery and never on the balance handed over; and paper statements are $1.75 each, passed through at cost. Month to month, no long-term agreement and no minimum.

The point of setting it out this way is not that these are the only acceptable answers. It is that a billing company should be able to give them.

Why the basis matters more than the rate

A rate is a single comparison. A basis is a structural decision about who carries which risk.

Charging on gross charges means the billing company is paid whether or not the claim works. Charging on insurance collections means it is paid when the payer pays. Charging on patient payments means it is paid on money the practice may well have collected without help. Each of those aligns the two parties differently, and that alignment lasts as long as the relationship does.

Full detail is on the pricing page, and the cost calculator works it against your own figures.

Related reading

• CareVixis pricing
• Practice cost calculator
• Questions to ask before hiring a billing company
• CareVixis compared with doing it yourself